Site owner Retail Convergence is also shutting down
SmartBargains.com, a discount shopping site, according to the
report.

Some employees were offered other positions in the company, and
everyone was offered some kind of severance package, a source
close to the company told us.

"It was a mess upstairs. People were crying all over the place,"
one unnamed employee told the Boston Business Journal.

Rue La La operator Retail Convergence raised about $25 million
from General Catalyst Partners and Breakaway
Partners before being acquired by a company called GSI Commerce
for $350 million, reports The Boston Business Journal.

eBay then bought GSI Commerce in 2009, and Rue
La La got $500 million in debt and equity financing as part
of the deal, according to the report. Retail Convergence, the
owner of Rue La La and SmartBargains.com was spun out as part of
that deal.

Here's the full statement from Rue La La:

Since launching in 2008, Rue La La has transformed online
shopping and has become a leader in the “private sale” shopping
space. In a continued effort to revolutionize off-price
shopping, we have made the strategic decision to double down on
our core business. This heightened focus on our core
includes the restructuring of our Rue Local business by
outsourcing our sales force and consolidating SmartBargains.com into Rue La La. SmartBargains.com was originally launched
1999. These moves unfortunately resulted in the elimination
of some staff positions. Rue La La has continued to see
dramatic growth with nearly $300MM in sales in 2011 and similar
growth planned for 2012 and beyond.